The South China Sea didn’t get a lot of respect – until the last few decades anyway. Now the area that rests between China and its fledgling Southeast Asian neighbors has become a geopolitical flash point. Tensions in the sea turned into a shooting war in the 1970s and looks like it could again.

The contenders include the Philippines, a relative light weight, in one corner, backed by long time ally and former colonial ruler, the United States. In the other corner is China, with few real allies in the region, but a heavyweight with plenty of power to land a knockout punch. China claims most of the sea as well as the disputed Spratly and Paracel islands.

And in yet another corner is upstart Vietnam, also a partial claimant, that is forging new military ties with one-time foe, the U.S., and courting another South Asian heavyweight, India, whose navy has berthing rights in Vietnam. Russia is also interested in naval bases in Vietnam. Other South China Sea claimants include Taiwan, Malaysia and Brunei. How all of this will play out is anybody’s guess.

Added to the fray is the recent standoff between China and the Philippines at Scarborough Shoal in the South China Sea, which has just entered its fourth month — with no resolution in sight. The shoal is rich in fishing resources but the heart of the issue is control of the sea and its oil and gas reserves. If either country backs down at Scarborough Shoal it would set a precedent for the rest of the area.

Since April, Chinese and Filipino accusations and innuendo over the shoal abound, ships have come and gone and returned again, saber rattling has intensified, and ambassadors and diplomats have met, disagreed and disagreed some more. And on July 31, adding to the tension, the Philippines disclosed that it will offer more service contracts in areas with overlapping claims in the South China Sea for oil and gas exploration.

The sites off southwestern Palawan province in the Philippines, represented by service contracts 3, 4 and 5, are near the Malampaya and Sampaguita natural gas discoveries. Sampaguita is located near the Reed Bank, an area claimed by China.

Oil reserve estimates for the South China Sea vary. One Chinese estimate places potential oil resources as high as 213 billion barrels of oil (bbl). A 1993/1994 U.S. Geological Survey (USGS) report estimated the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea at 28 billion bbl.

Natural gas, according to the USGS, is more abundant in the area than oil. The USGS estimates that about 60%-70% of the area”s hydrocarbon resources are natural gas and has placed the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea at 266 Trillion Cubic Feet (Tcf).

Overlapping claims

As Chinese and Philippine diplomats spar over the standoff, politicians in Manila continue to press for an international solution, trying to force Beijing into accepting widely recognized Exclusive Economic Zone (EEZ) definitions. The Philippines claim Scarborough Shoal as part of its 200-nautical mile EEZ, while China rejects that claim and counters that the area was mapped as Chinese territory as early as the 13th century.

Stein Tonnesson, Director of the East Asian Peace Program at Uppsala University in Sweden, shed light on the standoff.

Speaking by phone, Tonnesson said that Scarborough Shoal does not qualify as an island with a right to a 200-nautical mile (EEZ). “It is so small that it cannot sustain human habitation or an economic life of its own. These are the criteria that according to The United Nations Convention on the Law of the Sea (UNCLOS) must be met in order for a shoal or reef or other feature to constitute an island with a right to its own EEZ,” he said

Tonnesson said that the Philippines should propose to China an agreement to the effect that the disputed Scarborough Shoal can have only a 12-nautical mile territorial sea around it and that this 12-nautical mile territorial sea should be subjected to a permanent fishing ban, enforced by both countries.

In that way, according to Tonnesson, future conflicts like this one would be prevented and open up the prospect of future negotiations concerning the maritime boundary between the EEZs of the Philippines and China.

Carlyle Thayer, a professor at the Australian Defence Force Academy doesn’t think the answer is so simple.

“I have been grappling with this question,” Thayer said by email.

“China is claiming sovereignty over the rocks at Scarborough Shoal even though it does not physically occupy them. On the basis of this China claims a 12 nautical mile territorial sea that rocks are entitled to under UNCLOS. Under this interpretation China is then able to claim sovereign rights over the resources in the water column (the fish) and seabed. If we assume that the only thing the Philippines is claiming is its EEZ based on its baselines around Luzon, then the area of overlap would be the only area in dispute.”

“But the Philippines is claiming sovereignty over the shoal on the basis of continual administration and what I would call intermittent occupation over the years since independence,” he added.

According to Thayer, the Philippines once had a lighthouse on Scarborough Shoal. The Philippines” EEZ overlaps the rocks and thus the Philippines claims sovereign rights over all the resources in the water column and seabed that fall within its EEZ including the waters around the rocks at shoal.

Thayer also said that possession is “nine tenths of the law” in such cases, and that neither Vietnam nor the Philippines are going to relinquish islands and rocks that they currently occupy.

“Sovereignty over territory – whether rocks or islands – is a matter for China and the Philippines to decide. There is no instant remedy to settle this matter,” he said.

According to the UNCLOS, nations with conflicting claims should work out disagreements themselves.

Thayer also commented on the military build-up in the region, stating that most countries are modernizing their armed forces and equipping them with a variety of sophisticated anti-ship missiles.

“There is also something of a mini-arms race going on with the proliferation of conventional submarines in the fleets of Southeast Asian navies as well as China. In sum, the South China Sea is contested, it will become increasingly congested, and it will only be a matter of time before there is an incident in which armed force is used,” he added.

WikiLeak cables and little tricks

China’s 13th century mapping claim, however, took a hit a few months ago. In April news broke of a message sent to Washington by the U.S. Embassy in Beijing on September 8, 2008 and later uncovered by WikiLeaks.

Cable 08BEIJING3499 stated that a Chinese Ministry of Foreign Affairs official and a local scholar could not identify specific historical records to justify China”s claim that covers the whole Spratly islands and areas within other countries” EEZs.

Notwithstanding, Beijing sees things differently. A July 26 editorial in the People’s Daily, an organ of the Central Committee of the Communist Party, lambasts the Philippines for bidding out oil and gas exploration areas in “China’s territorial waters,” and for sending warships to “harass Chinese fishermen in the Huangyan Island [Scarborough Shoal] waters.” It also condemns “joint military drills with the United States involving the exercise of retaking petroleum drilling platform[s]” and bemoans Philippine “threats to invite U.S. reconnaissance aircraft to patrol disputed areas in the South China Sea.” The editorial also said that the Philippines was trying to take advantage of the South China Sea issue to “kidnap” the Association of Southeast Asian Nations (ASEAN).

“The South China Sea would have been much more peaceful if without the successive little tricks of the Philippines,” it added.

A U.S. Navy commander, speaking on condition of anonymity, that was part of a recent National War College delegation sent to China to dialogue with their counterparts at the PLA National Defense University, said that the subject of the South China Sea was raised repeatedly during the talks.

He said that a Funan University professor stated that the Chinese position on freedom on navigation in international waters would probably evolve to mirror the American position after China develops a blue water navy like the U.S.

The naval officer also noted the interesting differences between what he called “the old guard” at the talks and “twenty-somethings who literally banged their heads on the table while a senior went on an extended tirade reiterating longstanding Chinese government positions.”

At the time of this writing the maritime standoff at Scarborough Shoal continues to play out. But with hydrocarbons in the balance, as well as national pride at stake – by and large deep-seated Chinese nationalism — this could turn into one of the defining energy-geopolitical stories of the decade.